Ten ways to stay debt free this year

Staying debt free is never an easy option and for most people overspending each month is the norm. Using these 10 tips may help you to stay debt free this year and in the future.

Ditch the credit card

Credit and store cards will eat your money if you don’t pay them off every month. Interest charges basically mean you are giving lenders your hard earned salary.

Missed or late payments means the lenders are having a bonus month with your money. You are essentially paying extra for your purchases when paying interest. Avoid this by paying with cash or using debit cards.

Always pay more than the minimum payment

If you must use credit or store cards then make sure you pay more than the minimum payment each month. Lenders love minimum paying customers as it means that the customer is hooked for longer period by simply paying the interest each month.

Avoid impulse spending

Impulse spending is a nasty habit and can lead to high levels of debt. If you are prone to impulse spending then look out for your own personal spending triggers. You may be someone who spends when feeling down or because you feel you deserve it. Buying goods that you don’t really need or want will waste money. Consider saving this money and putting it to good use such as clearing a credit card or loan.

Switch lenders

Look at ways to cut your interest rates by transferring credit cards to lower interest cards or cards with interest free periods. You are the customer and it is in your interest to get the best deal possible for your money. Switching credit cards to zero interest cards will give you some breathing space and allow you to get account balances down as quickly as possible.

Set up direct debit payments

Paying your credit cards, loans, and fuel bills by direct debit can have benefits. By doing so you should avoid any late or missed payment charges. You can also save money by setting up direct debits as some companies give money off to customers who pay by direct debit.

Take on an extra job

If you have debts that are becoming uncontrollable then consider taking on a part-time or weekend job. This does not have to be a long-term option but can help reduce debts rapidly. A few extra hours a week can soon mount up over the course of a year. The extra effort will be worth it to clear off debts and reduce financial stress. Look at telecommuting jobs that can mean working for a few hours each evening from your own home computer.

Don’t live beyond your means

An easy thing to say but not so easy to achieve. Many people spend more than they earn each month by using credit cards. Look for ways to cut down on spending in certain areas of your life. This could be buying own brand goods in supermarkets or cutting down on petrol bills by using public transport. Write a list of exactly where your money goes each month and see where cuts can be made.

Consolidate your debts

Taking out one large loan to pay off all present debts may make a large difference to the interest you pay each month. It may also cut the amount you are paying to multiple lenders each month. Only use this option if the interest rates on the new loan work out less than your present interest rates. This is not an option for everyone but it can help clear debts rapidly.

Seek professional help

If you have uncontrollable debts do not stick your head in the sand in the hope they will disappear. Seek advice from official avenues of help. These agencies are designed to help people find the best way to clear their debts and they will not charge you for the advice they give. Do not approach debt agencies that say they will help if you pay them a fee.

Don’t panic over debt

If you are in debt remember that you are not alone. Do not panic and take out more loans or credit to help pay debts you already have. Taking on more debt will only lead to more debt problems. Clearing debts and becoming debt free is a major achievement for most people but it is achievable. When your debts are cleared it will be one less thing to worry about in your life.

dont really think this write up is applicable in the Nigerian market, i think its more suitable in the overseas market…

Big Boss

Bidemi, I share your view to a great extent that most of the recommendations above will not apply in our part of the world(especially Nigeria). Hence, I think whoever oversses this column of punch should always read through whatever is downloaded and consider its relevance to the reading audience in the immediate local community while not losing sight of the international audience.

Big Boss

To me, the assertion-“Don’t live beyond your means” as popular as it may sound is very limiting and also condone mediocrity. Rather than ask people to live below their means, I would encourage them to expand their means through reasonable investment culture that would enable them earn passive income while they are still in their current employment. By so doing, they will be able to live a better live that is at least close to their dream. Given the current situation as regards employee remuneration in Nigeria where your Take Home cannot even take you to the Bus Stop and you cannot do more jobs in a given day due to the long working hours, your best bet is to expand your means if you desire to live a meaningful life. Taking on extra job in this part of the world is unthinkable EXCEPT you want to relocate to 6 feet beneath the earth!